Auto trends to watch for in 2013

Fortunately for the Canadian economy, the world didn’t end on December 21st, 2012, as predicted by the Mayan calendar.

According to auto analysts and market watchers, 2013 is expected to be another rebound year for the automotive sector (which accounts for 25 per cent of the economy).

On the manufacturing side, Toyota has announced it will add 400 employees to its assembly operations this year. Ford will add 300 employees at its Oakville assembly plant, and Honda expects to maintain record high production output throughout 2013.

These positive developments in the manufacturing sector are being driven by increased new car sales in the U.S. and Canada and by pent-up demand in the marketplace (the number of vehicles in the eight to 12 year-old range has increased by 23 per cent since 2007).

One of the recurring trends in recent years has been increased fuel economy. Most automakers will continue producing fuel efficient vehicles in all categories in 2013, focusing on smaller engines, altered transmissions and a reduction of weight using aerodynamic designs and lighter materials.

Another trend that’s expected to continue driving the auto sector is leasing. In 2011, leasing represented 20 per cent of sales in Canada and could account for 25 per cent in 2012 (final figures aren’t yet available).

The growing popularity of leasing will likely continue this year, fueled in part by increased residual values of used vehicles. This trend will bring more off-lease vehicles into the used vehicle market, which has experienced reduced inventory levels in recent years.

This year will see new car dealers continue to embrace digital and mobile technologies. Dealership personnel (particularly managers, salespeople and service advisors) are increasingly reliant on smartphones, tablet devices and other digital tools to communicate with suppliers, customers and colleagues.

As 2013 unfolds, I expect to see more dealers embrace social networking sites like Facebook, YouTube, Twitter and DealerRater to manage their online reputations. Establishing a presence on these sites has become more of a standard requirement for all dealers.

Most automobiles today come equipped with an array of sophisticated onboard electronics and digital devices. A few dealers have begun offering orientation seminars for customers to learn how to operate the new features. I expect these types of seminars to become more prevalent this year.

The process of buying and servicing an automobile at a new car dealership will continue to evolve. By this, I mean that customers will still want to visit dealerships and browse through showrooms; they will still want to physically bring their vehicles in for service work.

But, increasingly, we are beginning to see evidence of the shop-at-home era when buying a car. Some dealers have begun offering flexible forms of customer service, such as transporting a vehicle to a prospect’s home/office for a test drive and picking up vehicles for service or repair work.

This shop-at-home service is still relatively new, and rare, but it’s just one of the value-added benefits that dealers are experimenting with in an attempt to better serve customers who are increasingly pressed for time.

One of the biggest challenges faced by dealers and manufacturers is attracting Gen Y or younger buyers to their showrooms.

According to R.L. Polk & Co., in April 2007, buyers aged 18 to 34 represented approximately 17 per cent of new car purchases, whereas in April 2012, the percentage of buyers in that age bracket fell to 11 per cent.

This desire to reach Gen Y buyers will continue to be a challenge for our industry, but I am confident that we will continue to find new and creative ways of reaching this emerging market.

On behalf of the Trillium Automobile Dealers Association, I everyone the very best in 2013!

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